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Alpha Natural Resources Inc (NYSE:ANR)
Beneish M-Score
-2.10 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Alpha Natural Resources Inc has a M-score of -2.10 signals that the company is a manipulator.

ANR' s 10-Year Beneish M-Score Range
Min: -4.15   Max: -0.58
Current: -2.1

-4.15
-0.58

During the past 13 years, the highest Beneish M-Score of Alpha Natural Resources Inc was -0.58. The lowest was -4.15. And the median was -2.87.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Alpha Natural Resources Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0469+0.528 * 3.6059+0.404 * 0.5908+0.892 * 0.7594+0.115 * 1.0174
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.183+4.679 * -0.1231-0.327 * 1.1599
=-2.10

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Accounts Receivable was $307 Mil.
Revenue was 1054.098 + 1111.773 + 1093.7 + 1191.094 = $4,451 Mil.
Gross Profit was 103.121 + 65.793 + 75.75 + -54.53 = $190 Mil.
Total Current Assets was $2,038 Mil.
Total Assets was $11,421 Mil.
Property, Plant and Equipment(Net PPE) was $8,640 Mil.
Depreciation, Depletion and Amortization(DDA) was $880 Mil.
Selling, General & Admin. Expense(SGA) was $162 Mil.
Total Current Liabilities was $971 Mil.
Long-Term Debt was $3,820 Mil.
Net Income was -512.627 + -55.698 + -358.788 + -458.241 = $-1,385 Mil.
Non Operating Income was 0.74 + 249.683 + -8.063 + 7.435 = $250 Mil.
Cash Flow from Operations was -217.048 + -53.961 + -69.561 + 111.083 = $-229 Mil.
Accounts Receivable was $386 Mil.
Revenue was 1335.123 + 1333.591 + 1558.353 + 1633.809 = $5,861 Mil.
Gross Profit was 70.629 + 157.584 + 467.792 + 206.828 = $903 Mil.
Total Current Assets was $1,977 Mil.
Total Assets was $12,598 Mil.
Property, Plant and Equipment(Net PPE) was $9,234 Mil.
Depreciation, Depletion and Amortization(DDA) was $959 Mil.
Selling, General & Admin. Expense(SGA) was $181 Mil.
Total Current Liabilities was $1,202 Mil.
Long-Term Debt was $3,355 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(307.277 / 4450.665) / (386.495 / 5860.876)
=0.06904069 / 0.06594492
=1.0469

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(65.793 / 5860.876) / (103.121 / 4450.665)
=0.15404404 / 0.04272036
=3.6059

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (2038.29 + 8640.02) / 11421.134) / (1 - (1976.716 + 9234.488) / 12598.194)
=0.06503943 / 0.11009435
=0.5908

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=4450.665 / 5860.876
=0.7594

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(959.092 / (959.092 + 9234.488)) / (880.396 / (880.396 + 8640.02))
=0.09408785 / 0.09247453
=1.0174

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(162.176 / 4450.665) / (180.531 / 5860.876)
=0.0364386 / 0.03080273
=1.183

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((3820.483 + 971.319) / 11421.134) / ((3354.799 + 1202.103) / 12598.194)
=0.41955571 / 0.36171073
=1.1599

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(-1385.354 - 249.795 - -229.487) / 11421.134
=-0.1231

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Alpha Natural Resources Inc has a M-score of -2.10 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Alpha Natural Resources Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 1.25230.97280.83290.97851.40610.76991.25850.66380.9686
GMI 0.57461.18271.01671.26430.6891.13531.41421.03093.3113
AQI 11.5980.93940.93520.40370.8970.72731.3370.47680.8547
SGI 1.32271.11651.01321.65731.01081.56971.81450.98130.7102
DEPI 00.85150.93210.69352.82620.68172.83520.61431.0171
SGAI 0.73690.93891.38830.58052.3440.67661.16410.55931.0671
LVGI 0.82141.00320.98940.96440.58460.96691.26771.18441.1407
TATA -0.0475-0.0996-0.1092-0.1931-0.0578-0.1151-0.0848-0.2261-0.1022
M-score 1.86-2.80-3.22-2.87-2.46-2.73-1.46-4.09-2.14

Alpha Natural Resources Inc Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
DSRI 0.64520.46870.38740.66381.13361.00680.91040.96861.23541.0469
GMI 1.41431.47651.35131.03090.97850.91241.1253.31134.8513.6059
AQI 5.20210.16980.50750.47680.13640.98110.72390.85470.910.5908
SGI 1.91751.72791.24140.98130.80560.71810.72370.71020.74240.7594
DEPI 0.66021.84060.52250.61432.47370.95131.03241.01711.02561.0174
SGAI 0.98850.39540.44810.55930.61541.06381.1161.06711.11941.183
LVGI 1.13371.19591.23171.18441.29391.09971.18141.14071.10941.1599
TATA -0.0921-0.2636-0.2716-0.2261-0.229-0.072-0.1048-0.1022-0.1081-0.1231
M-score -0.58-3.50-4.15-4.09-3.82-3.17-3.42-2.14-1.06-2.10
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